How to create a financial forecast for a handball club?
Developing and maintaining an up-to-date financial forecast for your handball club is key in order to maintain visibility on your business’s future cash flows.
If you feel overwhelmed at the thought of putting together a handball club financial forecast then don’t worry as this guide is here to help you.
We'll cover everything from: the main objectives of a financial forecast, the data you need to gather before starting, to the tables that compose it, and the tools that will help you create and maintain your forecast efficiently.
Let's get started!
Why create and maintain a financial forecast for a handball club?
In order to prosper, your business needs to have visibility on what lies ahead and the right financial resources to grow. This is where having a financial forecast for your handball club becomes handy.
Creating a handball club financial forecast forces you to take stock of where your business stands and where you want it to go.
Once you have clarity on the destination, you will need to draw up a plan to get there and assess what it means in terms of future profitability and cash flows for your handball club.
Having this clear plan in place will give you the confidence needed to move forward with your business’s development.
Having an up-to-date financial forecast for a handball club is also useful if your trading environment worsens, as the forecast enables you to adjust to your new market conditions and anticipate any potential cash shortfall.
Finally, your handball club's financial projections will also help you secure financing, as banks and investors alike will want to see accurate projections before agreeing to finance your business.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
What information is used as input to build a handball club financial forecast?
A handball club's financial forecast is only as good as the inputs used to build it.
If you are creating (or updating) the forecast of an existing handball club, then you mostly need your accounting information, key historical operating non-financial data, and your team’s input on what to expect for the coming years.
If you are building financial projections for a handball club startup, you will need to have done your research and have a clear picture of your competitive environment and go-to-market strategy so that you can forecast sales accurately.
For a new venture, you will also need a precise list of the resources needed to keep the handball club running on a day-to-day basis and a list of the equipment and expenditures required to start the business (more on that later).
Let's now take a closer look at the elements that make up your handball club's financial forecast.
The sales forecast for a handball club
From experience, it is usually best to start creating your handball club financial forecast by your sales forecast.
To create an accurate sales forecast for your handball club, you will have to rely on the data collected in your market research, or if you're running an existing handball club, the historical data of the business, to estimate two key variables:
- The average price
- The number of monthly transactions
To get there, you will need to consider the following factors:
- Player Injuries: Injuries to key players can significantly affect the team's performance, leading to a decrease in the number of fans attending games and buying merchandise, ultimately resulting in a decrease in average ticket prices and monthly transactions.
- Team Performance: The success of the handball team, such as winning important games or championships, can attract more fans to games and increase demand for club merchandise, resulting in higher average ticket prices and monthly transactions.
- Competition: The presence of other popular handball clubs in the same region can create competition for fans and sponsors, potentially leading to a decrease in average ticket prices and monthly transactions for your club.
- Economic Conditions: Economic downturns or recessions can have a negative impact on people's disposable income, leading to a decrease in the number of fans attending games and buying merchandise, ultimately resulting in a decrease in average ticket prices and monthly transactions.
- Player Transfers: High-profile player transfers, either in or out of the club, can generate buzz and excitement among fans, potentially leading to an increase in average ticket prices and monthly transactions as fans want to see the new players in action.
Once you have an idea of what your future sales will look like, it will be time to work on your overhead budget. Let’s see what this entails.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The operating expenses for a handball club
The next step is to estimate the costs you’ll have to incur to operate your handball club.
These will vary based on where your business is located, and its overall size (level of sales, personnel, etc.).
But your handball club's operating expenses should normally include the following items:
- Staff Costs: This includes salaries, benefits, and any other expenses related to hiring and managing staff members such as coaches, trainers, and administrative personnel.
- Equipment and Gear: Handball clubs require a variety of equipment and gear for players such as balls, jerseys, shoes, and protective gear. These expenses may also include equipment maintenance and replacement costs.
- Facility Rental: Renting a facility to host practices, games, and events can be a significant expense for a handball club. This may include fees for field or court rentals, as well as utilities and cleaning costs.
- Travel Expenses: Handball clubs may incur travel expenses for away games and tournaments, including transportation, lodging, and meals for players and staff.
- Marketing and Advertising: To attract players and fans, handball clubs may need to invest in marketing and advertising efforts such as creating flyers, posters, and social media campaigns.
- Uniforms and Merchandise: In addition to player gear, handball clubs may also sell team uniforms and merchandise, which will require upfront investment and ongoing inventory management.
- Insurance Costs: Handball clubs need insurance coverage for liability, property, and equipment. This expense may vary depending on the club's size and activities.
- Accountancy Fees: As a business entity, handball clubs are required to keep accurate financial records and may need to hire an accountant to assist with tax filings and financial reporting.
- Software Licenses: To manage operations and communicate with players and fans, handball clubs may need to invest in software licenses for team management, communication, and marketing purposes.
- Banking Fees: Handball clubs may incur fees for maintaining a business bank account, processing transactions, and using other financial services.
- Legal Expenses: Handball clubs may need to seek legal advice or representation for contract negotiations, liability issues, or other legal matters.
- Medical Expenses: Injuries are a common occurrence in handball, and clubs may need to cover medical expenses for players, coaches, and staff.
- League Fees: Handball clubs may need to pay fees to participate in leagues and competitions, which can vary depending on the level and type of competition.
- Training and Development: To improve player skills and coaching strategies, handball clubs may invest in training and development programs and resources.
- Food and Beverage: For longer events and tournaments, handball clubs may need to provide food and beverages for players, staff, and volunteers.
This list is not exhaustive by any means, and will need to be tailored to your handball club's specific circumstances.
What investments are needed to start or grow a handball club?
Creating and expanding a handball club also requires investments which you need to factor into your financial forecast.
Capital expenditures and initial working capital items for a handball club could include elements such as:
- Handball court construction - This includes the cost of materials, labor, and equipment needed to build a handball court, including the flooring, walls, and goal posts.
- Equipment purchases - This includes the cost of purchasing equipment such as handballs, jerseys, goal nets, and other necessary items for the team to play and practice.
- Facility renovations - This includes any upgrades or improvements needed for the club's facilities, such as adding new seating, lighting, or locker rooms.
- Transportation vehicles - If the club needs to travel for games or tournaments, purchasing or leasing transportation vehicles such as buses or vans may be necessary.
- Gym equipment - In addition to handball-specific equipment, the club may also need to purchase gym equipment such as treadmills or weightlifting machines for training and fitness purposes.
Again, this list is not exhaustive and will need to be adjusted according to the circumstances of your handball club.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
The financing plan of your handball club
The next step in the creation of your financial forecast for your handball club is to think about how you might finance your business.
You will have to assess how much capital will come from shareholders (equity) and how much can be secured through banks.
Bank loans will have to be modelled so that you can separate the interest expenses from the repayments of principal, and include all this data in your forecast.
Issuing share capital and obtaining a bank loan are two of the most common ways that entrepreneurs finance their businesses.
What tables compose the financial plan for a handball club?
Now let's have a look at the main output tables of your handball club's financial forecast.
The forecasted profit & loss statement
The profit & loss forecast gives you a clear picture of your business’ expected growth over the first three to five years, and whether it’s likely to be profitable or not.
A healthy handball club's P&L statement should show:
- Sales growing at (minimum) or above (better) inflation
- Stable (minimum) or expanding (better) profit margins
- A healthy level of net profitability
This will of course depend on the stage of your business: numbers for an established handball club will look different than for a startup.
The projected balance sheet
The projected balance sheet gives an overview of your handball club's financial structure at the end of the financial year.
It is composed of three categories of items: assets, liabilities and equity:
- Assets: are what the business possesses and uses to produce cash flows. It includes resources such as cash, buildings, equipment, and accounts receivable (money owed by clients).
- Liabilities: are the debts of your handball club. They include accounts payable (money owed to suppliers), taxes due and bank loans.
- Equity: is the combination of what has been invested by the business owners and the cumulative profits to date (which are called retained earnings). Equity is a proxy for the value of the owner's stake in the business.
The cash flow forecast
Your handball club's cash flow forecast shows how much cash your business is expected to consume or generate in the years to come.
It is best practice to organise the cash flow forecast by nature to better explain where cash is used or generated by the handball club:
- Operating cash flow: shows how much cash is generated by the operating activities
- Investing cash flow: shows how much will be invested in capital expenditure to maintain or expand the business
- Financing cash flow: shows if the business is raising new capital or repaying financiers (debt repayment, dividends)
Keeping an eye on (and regularly updating) your handball club's cash flow forecast is key to ensuring that your business has sufficient liquidity to operate normally and to detect financing requirements as early as possible.
If you are trying to raise capital, you will normally be asked to provide a monthly cash flow forecast in your handball club's financial plan - so that banks or investors can assess seasonal variation and ensure your business is appropriately capitalised.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Which tool should you use to create your handball club's financial forecast?
Using the right tool or solution will make the creation of your handball club's financial forecast much easier than it sounds. Let’s explore the main options.
Using online financial forecasting software to build your handball club's projections
The modern and easiest way is to use professional online financial forecasting software such as the one we offer at The Business Plan Shop.
There are several advantages to using specialised software:
- You can easily create your financial forecast by letting the software take care of the financial calculations for you without errors
- You have access to complete financial forecast templates
- You get a complete financial forecast ready to be sent to your bank or investors
- You can easily track your actual financial performance against your financial forecast, and recalibrate your forecast as the year goes by
- You can create scenarios to stress test your forecast's main assumptions
- You can easily update your forecast as time goes by to maintain visibility on future cash flows
- You have a friendly support team on standby to assist you when you are stuck
- It’s cost-efficient and much cheaper than using an accountant or consultant (see below)
If you are interested in this type of solution, you can try our forecasting software for free by signing up here.
Calling in a financial consultant or chartered accountant
Outsourcing the creation of your handball club financial forecast is another possible solution.
This will cost more than using software as you can expect as your price will have to cover the accountant’s time, software cost, and profit margin.
Price can vary greatly based on the complexity of your business. For a small business, from experience, a simple three-year financial forecast (including a balance sheet, income statement, and cash flow statement) will start at around £700 or $1,000.
Bear in mind that this is for forecasts produced at a single point in time, updating or tracking your forecast against actuals will cost extra.
If you decide to outsource your forecasting:
- Make sure the professional has direct experience in your industry and is able to challenge your assumptions constructively.
- Steer away from consultants using sectorial ratios to build their client’s financial forecasts (these projections are worthless for a small business).
Why not use a spreadsheet such as Excel or Google Sheets to build your handball club's financial forecast?
You and your financial partners need numbers you can trust. Unless you have studied finance or accounting, creating a trustworthy and error-free handball club financial forecast on a spreadsheet is likely to prove challenging.
Financial modelling is very technical by nature and requires a solid grasp of accounting principles to be done without errors. This means that using spreadsheet software like Excel or Google Sheets to create accurate financial forecasts is out of reach for most business owners.
Creating forecasts in Excel is also inefficient nowadays:
- Software has advanced to the point where forecasting can be done much faster and more accurately than manually on a spreadsheet.
- With artificial intelligence, the software is capable of detecting mistakes and helping decision-making.
Spreadsheets are versatile tools but they are not tailor-made for reporting. Importing your handball club's accounting data in Excel to track actual vs. forecast is incredibly manual and tedious (and so is keeping forecasts up to date). It is much faster to use dedicated financial planning tools like The Business Plan Shop which are built specially for this.
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Use our financial projection templates for inspiration
The Business Plan Shop has dozens of financial forecasting templates available.
Our examples contain both the financial forecast, and a written business plan which presents, in detail, the company, the team, the strategy, and the medium-term objectives.
Whether you are just starting out or already have your own handball club, looking at our template is always a good way to get ideas on how to model financial items and what to write when creating a business plan to secure funding.
Takeaways
- A financial forecast shows expected growth, profitability, and cash generation metrics for your handball club.
- Tracking actuals vs. forecast and having an up-to-date financial forecast is key to maintaining visibility on your future cash flows.
- Using financial forecasting software is the modern way of creating and maintaining financial projections.
We hope that this guide helped you gain a clearer perspective on the steps needed to create the financial forecast for a handball club. Don't hesitate to contact us if you have any questions!
Need a convincing business plan?
The Business Plan Shop makes it easy to create a financial forecast to assess the potential profitability of your projects, and write a business plan that’ll wow investors.
Also on The Business Plan Shop
- Financial forecast example
- How to create a sales forecast for a business?
- Financial forecast template for a business idea
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Founder & CEO at The Business Plan Shop Ltd
